Thursday, July 21, 2005

Studies show that, there are two main criteria which should be considered while choosing any offshore outsourcing provider. One is local attractiveness of software outsourcing industry and second is the capability of workers. In India, software industry is the high paying industry and that itself makes it most attractive industry. While offshore outsourcing was started in way back 90's, it has grown and matured now to provide quality software development as per any standards. And Indian companies are very much interested in maintaining their quality. Highest numbers of CMM Level 5 companies are in India at present. On the other hand, other countries are not matching above criteria.Majority of fortune 500 companies are considering India as their preferred destination for software outsourcing. India has emerged as a 'value-for-money' destination that has both cost advantage and quality that matches the expectation of global multinational companies. Indian universities are producing above 3 million graduates and around 300,000 post graduates every year. Software outsourcing industry is the highest paying industry in India. So large percentage of these students choose offshore software development company as their destination. But India is not just about number of graduates. Every CEO or CIO wants maximum return on his investment and reduce the cost. So more and more companies in developed countries are sending their software development requirements to low cost software outsourcing companies in India. Advantage India has achieved in software outsourcing is not overnight. Offshore Outsourcing has grown and matured with time. In 90's, companies like GE, Citibank and British Airways started outsourcing to India and till then it has gone through many phases to compete with the best. After Initial phase, companies like Nortel and Lucent started to outsource product development to speed it up and market faster. During this time, Indian majors like Wipro and Infosys also started. In the second phase Y2K bug gave lot of work to Indian companies and gave them enough finance to grow. And with that, they started in service provider section as well as in enterprise application development. Next wave was of BPO Industry which is till going on and supply is not meeting the demand. And along with these, software outsourcing is increasing continuously. According to McKinsey, software outsourcing will increase 30-40% every year for next five years. According to Forrester research, around 3.3 million white collar jobs will be outsourced by 2015. And according to Deloitte research, two million financial sector jobs will be outsourced by 2009. And major chunk of this software outsourcing and other jobs are coming to India.